The Apothecary, a blog about health care and entitlement reform, is edited by Avik Roy, a Senior Fellow at the Manhattan Institute for Policy Research and a former health-care policy adviser to Mitt Romney. Avik also writes a weekly column on politics and policy for National Review.
The other contributors to The Apothecary are: Josh Archambault, Director of Health Care Policy at the Pioneer Institute in Boston; Robert Book of the American Action Forum; Chris Conover, Research Scholar in the Center for Health Policy and Inequalities Research at Duke University and an Adjunct Scholar at the American Enterprise Institute; Nicole Fisher of the University of North Carolina; John R. Graham of the Advanced Medical Technology Association; and Jeet Guram of Harvard Medical School.

A War On Sis? In California, Single Women Will Also Face A Doubling Of Health Insurance Premiums Due To Obamacare

SAN FRANCISCO, CA - MARCH 28: On the week of the one-year anniversary of President Obama's Patient Protection and Affordable Care Act, House minority leader Nancy Pelosi toured a brand new medical and dental facility in San Francisco's South of Market neighborhood. (Image credit: Getty Images via @daylife)

In 2014, Obamacare’s blizzard of regulations and mandates will transform the U.S. market for health insurance, among people who buy coverage for themselves. Of increasing concern is the phenomenon of “rate shock,” whereby many Americans face substantial increases in their health insurance premiums. Much of the debate has focused on young men, the “bros” who will bear the brunt of Obamacare’s rate hikes. But in California, women and men will see equally high jumps in the underlying cost of individual-market premiums.

This is because the Golden State already bars insurers from charging different rates on the basis of gender in the individual market. According to the National Women’s Law Center, 10 other states also do so: Colorado, Maine, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New York, Oregon, and Washington. A twelfth state, Vermont, limits but does not prohibit gender rating.

In other words, the rate shock that I described in my threepreviousposts on California applies equally to men and women. If you compare the cheapest plan on healthcare.gov to the cheapest Bronze plan on the new Covered California insurance exchange, premiums for healthy 25-year-olds will increase by 147 percent—a median of $183 on the exchange vs. $74 today—and premiums for healthy 40-year-olds will increase by 149 percent—a median of $234 on the exchange vs. $94 today.

If you adjust these numbers for the one-quarter of the population that has to pay more for health insurance today, due to pre-existing conditions, the median rate increases are still quite high: 92 percent for 25-year-olds, and 100 percent for 40-year-olds.

What’s surprising about these figures is that we would have expected 25-year-olds to face a greater degree of rate shock than 40-year-olds. It’s not clear why the reverse is true in California. And the California exchange did not release information about expected premiums for older individuals.

Subsidies aren’t free

Progressives insist that we must take into account the impact of Obamacare’s subsidies on the net cost of insurance under Obamacare. I’ve argued that it is irresponsible to be unconcerned with the underlying cost of insurance, because subsidies don’t magically fall from the sky. They cost money, and they don’t benefit everyone. The taxpayers who pay for these subsidies will face a double-whammy of higher taxes and higher premiums.

Nonetheless, I’ve run the numbers; as I discussed last week, healthy 25-year-old Californians who are single and childless can expect to pay more under Obamacare, despite subsidies, if they make more than $18,558 a year.

I’ve now also run the numbers for 40-year-olds. I performed a slightly different analysis in this case; given that the average California household contains 2.90 individuals, I looked at the price of premiums, net of subsidies, for individuals who belong to households with 3 people. On that basis, healthy 40-year-olds in California will pay more for health insurance, despite subsidies, if their household income is more than $28,785 a year. (If you adjust the baseline rate for those with pre-existing conditions, the break-even point moves up to $31,914 a year, but that average is a fictional number in real life.)

While premiums will go up equally for men and women in California, women should benefit more from Obamacare’s subsidies. That’s because 40-year-old women have lower average incomes than men do. According to the Census, in 2011 the median income for 35-to-44 year olds was $36,724; however, for men it was $43,967, and for women it was $29,095.

Single, childless women will be most affected

That’s great news for women whose wages are below the national average, or whose households that are larger than the national average. But it’s terrible news for those with above-average incomes, along with those who are unmarried or childless. And it’s also bad news for the men who today pay for the disproportionate share of Obamacare’s subsidies. (Over time, the gender-based income gap is likely to narrow; for more than a decade, women have outnumbered men in American colleges, and educational status is highly correlated to income.)

Importantly, this analysis looks at the price of health insurance for a single individual within a household, instead of family-based insurance. While this situation won’t apply to everyone, it may apply to an increasing number of Americans, because Obamacare’s employer mandate only requires companies to cover insurance for their workers, and not their workers’ families.

The bigger problem, of course, is what happens if the people who face higher costs under Obamacare drop out of the system and pay the fine instead. Such adverse selection would make premiums even less affordable, and require a greater outlay of taxpayer subsidies.

Overall, it remains true that younger men will bear the brunt of Obamacare’s changes to the individual market of health insurance. Most states don’t currently require insurers to charge the same rates to women and men, which means that premiums will go up more on men in those states. Furthermore, more women than men will be eligible for Obamacare’s subsidies, due to their lower average income.

But in California, if you’re a single woman with a decent-paying job that doesn’t offer health insurance, you’re about to get hammered.

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California women the Fault for your health insurance INCREASE is Senator’s Pelosi and Senator Boxer and Obama! Open your eyes. Do you like that your healthcare is going way up???? Get ride of Billionaire California senators Pelosi and Boxer who married Billionaires. They don’t care that you have to pay higher healthcare. THEY ARE MARRIED TO BILLIONAIRES. Please stop reelecting INCOMPETENTS!

Don’t be so hard on Scotty, he obviously has not taken a look at the history of governments role in Healthcare.

He has no idea, the economy will weaken, the current skilled doctors will be replaced with unskilled college grads, taking on a workload of 450% in patients of a normal doctor today, increasing emergency wait times from 1 hour to 4 days at minimum, doctor visits will no longer be walk-in but shift to 8 month waits for a check up, and many, many people will miss their chance to find out they HAD cancer 8 months ago…but hey, at least those to lazy to do whats necessary in life to provide their own healthcare will have insurance now.

@ScottyVa – I don’t think you quite understand how this new system works. I myself and my friends here in CA will tell you that it does NOT MATTER if a 45 year old woman has cancer and can now be insured. Why? Because the law does not require the insurance company to actually cover ANY of the costs. The mandate only requires that Insurers not reject people from being insured but that is it.

Proof ? Ask my friend, her Anthem rate went up to $250. Or ask me. I photocopied my rejection letters from Anthem. They denied my regular check ups twice. They used a 3rd party reviewer to tell me that I cant get the prescriptions I need because they don’t think I need it. They reject EVERY single visit and then send it to a review board which in turn rejects my claims. They create an endless loop such as requiring a written letter from my Doctor for RX’s and diagnosis. I pay $20 co pay but then Anthem rejected my visits and charged me $140/visit x2 = $240 for two standard checkups. I filed appeals for two years and they always seem to lose it. I never got anything back and they raised my rate 165% Yes. They raised my friends 200%

Scotty, get the facts before making assumptions. The whole, simply not getting rejected is simply smoke and mirrors.

Cade, Why are you listening to Avik Roy. This man is a complete idiot. He is to be a Healthcare Specialist, yet he offers no solutions to anything. If you do not like Obamacare, change it for the better. Or better yet come up with a better solution. We do have a Healthcare problem, and to date this is the only solution on the table. Avik, instead of being part of the problem, be part of the solution. Or else you will wake up one day and be nothing.

Hey pal, you had better make yourself make certain you are familiar with CA. insurance law as well as the coverage levels in the covered Califonia exchange. ALL of your statements are dead wrong, and as for you friend, yes Anthem, which is about the worst company to deal with, is jacking their rates, until jan. when they have to start comepeting with the exchange. You last statement is likely better laid at your feet than Scotty’s